Pilot Flying J revises class action settlement

Wednesday

Jul 24, 2013 at 10:35 AMJul 24, 2013 at 10:37 AM

NASHVILLE — The truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has revised a class action settlement that some trucking companies had criticized as a bad deal.

NASHVILLE — The truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has revised a class action settlement that some trucking companies had criticized as a bad deal.

The original settlement, given preliminary approval last week, required Pilot Flying J to reimburse trucking companies cheated out of fuel rebates for all the money they are owed with interest. But it only covered overcharging that occurred between Jan. 1, 2008, and July 15, 2013. The revised settlement covers overcharging as far back as Jan. 1, 2005.

The revision addresses one of the concerns raised by several trucking companies that did not participate in the settlement negotiations. In court papers, they called the settlement a rush job that doesn’t provide plaintiffs with much more than what they have already received. They have asked the federal courts for permission to continue pursuing their own lawsuits.

Meanwhile, Pilot and the eight companies that negotiated the settlement have asked the federal courts to halt the other lawsuits while the settlement process plays out. On Thursday, a panel of federal judges will hear arguments for both sides of the issue.

Mike Roberts, attorney for National Trucking Financial Reclamation Services, which was part of the settlement negotiations, said the revision had nothing to do with the Thursday hearing.

“We have negotiated for that time period from the very beginning,” Roberts said. “Through continued negotiations we were able to achieve these results.”

The revised settlement was granted preliminary approval on Wednesday. Any company that participated in either Pilot’s rebate program or its discount program is automatically included in the settlement unless that company chooses to opt out and pursue its own claims.

Roberts and other attorneys involved in the negotiations have praised the settlement. Attorney Don Barrett called it the most complete relief for customers he has seen in more than 40 years of practicing law.

But attorneys for several other trucking companies don’t see it that way. They have said it was negotiated in haste, without their input. They said the timeframe was inadequate, as was the relief offered to plaintiffs.

The settlement came just three months after federal agents raided the Knoxville headquarters of Pilot Flying J. The FBI began investigating Pilot Flying J after an employee claimed the nation’s largest diesel retailer, with annual revenues of around $30 billion, was systematically cheating its clients. Five employees have since pleaded guilty to federal charges.

In the meantime, the company has sent checks to its customers that it says compensate them for any money owed plus interest — the same thing they are promised in the settlement, according to court filings.

The main additional benefit from the settlement is the payment of attorneys’ fees, but plaintiffs would have to give up the possibility of collecting damages.

Jimmy Halsam runs Pilot Flying J while Tennessee Gov. Haslam has an undisclosed ownership share but says he has not been involved in day-to-day operations since he left the company in 2003 to run for Knoxville mayor. Pilot was founded by their father, Jim Haslam, and is owned by the family. Both Jimmy and Bill Haslam have denied any wrongdoing, and the company didn’t acknowledge wrongdoing in the settlement.

But trucking companies that want to pursue their own claims against Pilot have argued in court papers that the FBI affidavit implicates Jimmy Haslam. A wiretap recorded an employee saying Haslam was aware of the scheme.

The accusations of widespread fraud, if proved, could allow plaintiffs to collect punitive and triple damages, according to the filings.

Pilot attorney Aubrey Harwell said the settlement does not prevent anyone from pursuing damage claims.

“If they don’t like it, they can opt out and can sue to their heart’s delight,” he said.

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